Insurance is a risk-transfer contract, not an investment. Its sole purpose is to protect you against a catastrophic loss that would otherwise ruin your balance sheet. You should never purchase insurance for minor, affordable expenses. Instead, buy high-limit coverage for low-probability, high-severity risks.
Review your risk-transfer stack annually:
Protects your physical health and your capacity to sell labor.
Protects your dependents from the loss of your earning power and shields your physical real estate assets from destruction.
Provides a critical defense layer against civil litigation that could otherwise claw back your accumulated net worth.
See chapter “Insurance: Shielding Your Assets and Family” for the full mechanical treatment of each policy class.
Insurance is not an investment — it is protection against a financial loss that can ruin you.